21 May 2024
The recent announcement of the sale of the Madison Equities portfolio of 10 downtown office buildings and the announced departure from downtown of a couple of tenants (US Bank and TKDA) has led to a concern that downtown is failing. Nationally, some downtowns are in what is described as a “doom loop,” a downward cycle in which declining employment leads to fewer bars and restaurants, which in turn leads to falling employment, etc.
The demand for office space downtown relative to the supply has declined over the last several decades, a trend that accelerated during the pandemic. The concern with the Madison Equities office buildings is not that they are for sale but their low occupancy. However, the low occupancy of these 10 older buildings is not reflective of the overall occupancy downtown. Tenants downtown have simply migrated from older to newer buildings.
A supply of Class B and Class C office space is not necessarily a bad thing from an economic development perspective. More affordable office space is helpful for new and growing businesses, and less expensive for administrative offices. Some physically and functionally obsolete buildings may be renovated and repurposed, while others may be replaced.
Remote work has raised questions about the need for office space. However, offices remain necessary to interact with co-workers, mentoring, access resources, meet with clients and customers, and as an alternative to the distractions of working at home.
Headquarters for national and international businesses remain downtown, including Securian, Ecolab, and others.
Downtown is not a museum intended to preserve the past. Rather, it is organic, growing and changing with evolving cultures of business and society. Downtown is important for more reasons than its substantial tax base: it is symbolic of the city and serves as a gathering place where people live, work and visit.
St. Paul has a number of important assets centrally located downtown:
Downtown is located at the highest navigable point on the Mississippi River. It is THE major river in North America and known worldwide. Paddleford Packet Boat Company offers cruises up and down river from Harriet Island.
Downtown is located at the intersection of the major east-west interstate 94 and north-south interstate 35E.
The Union Depot is the hub for East Metro Light Rail and Bus Rapid Transit, and the metropolitan depot for a national passenger railway. There is a long skyway system linking a number of properties downtown and the St. Paul Downtown Airport is nearby.
Downtown is the home of the Minnesota State Capitol, seat of Ramsey County, and the location of St. Paul’s City Hall.
The headquarters of the Metropolitan Council is located downtown, along with federal courts in the Warren E. Burger Federal Building and federal agencies. Offices for all levels of government proliferate downtown.
Culture abounds downtown with the Science Museum of Minnesota, Minnesota Historical Society headquarters, Minnesota Children’s Museum, and the Minnesota Museum of American Art. Landmark Center is home to a number of cultural organizations who host performances in this beautiful, historic building. The Ordway Center for Performing Arts, Park Square Theatre, and other theaters are downtown. Minnesota Public Radio, American Public Media, and TPT–Twin Cities PBS are all headquartered downtown.
Several buildings in Lowertown house a thriving artist community with live/work spaces that are the focal point of semi-annual art crawls. The Saint Paul Farmers Market nearby is a citywide attraction in season.
The Minnesota Wild National Hockey League is located in Xcel Center on one end of downtown and the St. Paul Saints minor league baseball team in CHS Field on the other. Along with River Centre, these arenas host conventions, concerts and other meetings and activities. The Minnesota Boat Club, a rowing club on Raspberry Island, is the oldest athletic organization in the state.
Houses of worship downtown range from the magnificent Cathedral of Saint Paul to Central Presbyterian Church, First Baptist Church, Church of the Assumption, Church of Saint Mary in Lowertown, and Church of St. Louis, King of France.
The Saint Paul and Minnesota Foundation is downtown, along with other important foundations.
Headquarters for city and county law enforcement is downtown, as well as the Ramsey County Adult Detention Center. The Minnesota National Guard has an armory on Cedar Street near the Capitol.
Higher education is represented by Saint Paul College and Metropolitan State University on the periphery of downtown; there are a variety of schools and other places of learning downtown. The George Latimer Central Library is on Rice Park and anchors the city’s public library system.
United Hospital, Regions Hospital, and Children’s Minnesota – St. Paul Hospital are downtown along with many medical and dental offices.
Downtown has a growing residential neighborhood. Senior and affordable housing has been augmented the last few decades with market-rate housing, most notably and recently on the Near West Side.
There are wonderful parks downtown, from Rice Park to Mears Park. Vento Nature Sanctuary adjoins Lowertown and there are plans to improve Pedro Park and a Riverwalk along Kellogg Boulevard. There is a Children’s Outdoor Playspace for kids who live, attend school or daycare, and visit downtown. The National Park Service’s offices for the Mississippi National River & Recreation Area are downtown.
Downtown has a number of hotels, bars, restaurants, retail establishments and entertainment that is synergistic with downtown attractions described above.
The foregoing is conceptual and not intended to be a comprehensive list of everything downtown. There are abundant opportunities to build on the strengths of many successful organizations downtown; opportunities limited only by our imagination.
Jim Miller is a commercial real estate investor and broker who has had an office in downtown and lived in Saint Paul for 50 years. He has a BA from Harvard College and an MBA from the University of Minnesota. For 25 years he was an active member of FIABCI, the International Real Estate Association, visiting and studying major cities around the world.
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